MercoPress. South Atlantic News Agency

Petrobras corruption probe encroaching President Rousseff; party's treasurer arrested

The arrested ruling Workers Party treasurer, Vaccari Neto, has been charged with receiving “irregular donations” for the party, from Petrobras contractors

A widening investigation into alleged corruption at Brazil’s state-controlled oil giant Petrobras took a step closer to President Dilma Rousseff on Wednesday when police arrested the ruling party’s treasurer, João Vaccari Neto, who has been charged with receiving “irregular donations” for the Workers’ Party, or PT, from some of the oil company’s suppliers.

 Police allege the suppliers inflated contracts with Petrobras, funneling some of the proceeds to politicians and election campaigns.

Pedro Barusco, a former manager of Petrobras’s engineering and services department who is cooperating with prosecutors, told a congressional hearing in March that he amassed nearly 100 million dollars in bribes as part of the alleged scheme and the PT may have received twice as much.

Barusco told lawmakers he used to meet with Vaccari in high-end hotels or restaurants to discuss how to share bribes, and that some of the money was passed on to president Rousseff’s 2010 election campaign.

Vaccari testified last week before a congressional committee investigating the allegations and denied accepting any illegal donations. Rousseff has denied any involvement in or knowledge of the alleged corruption. Brazil’s Attorney General Rodrigo Janot said in March that there are no facts to motivate an investigation of the president.

The country’s Supreme Court in March approved investigations into dozens of sitting congressmen, including members of Rousseff’s Workers Party. Last week, police said they found evidence of similar scams at Brazil’s health ministry and at state-owned bank Caixa Econômica Federal.

Both the health ministry and Caixa said they would investigate the allegations and are cooperating with police and prosecutors. Caixa said Tuesday that according to reports from the Federal Police and the prosecutors’ office, there are “no indications of irregular practices” by the bank or its employees.

Police said at a news conference that they arrested Vaccari at his São Paulo home early Wednesday morning and brought his wife in for questioning, and also arrested three other people.